- A new oil Pipeline is to help "boost Algeria's oil exports" when it becomes operative in 2005. The OZ2 Oil Pipeline is currently being constructed by Sonatrach, the Algerian national oil and gas company, a French-Italian consortium and British companies.
The 800 km pipeline from Haoud el Amra in southern Algeria to Arzew on the Mediterranean coast is foreseen to transport the equivalent of 25 percent of France's oil consumption when it is finalised. The OZ2 Oil Pipeline follows the route of the existing OZ1 pipeline which was built approximately 30 years ago.
Current work at the OZ2 pipeline focuses on six pumping stations, which will transmit oil through the pipeline, which is due for operation in 2005. Demag Delaval Industrial Turbomachinery Ltd (DDIT) - a British engineering company fully owned by Siemens AG - today was reported to have secured financing of its supply of 15 gas turbine units for the pipeline's pumping stations.
According to a release by the London-based Export Credits Guarantee Department (ECGD), the British company has secured a reinsurance of its supply contract, worth approximately £25 million (euro 37.5 million). ECGD - the UK's official export credit agency - is reinsuring the turbines built by DDIT in conjunction with the European export credit agencies SACE (Italy) and COFACE (France). The same parties were involved in supplying equipment under phase one of the OZ2 Oil Pipeline project including reinsurance from ECGD.
This contract to supply 15 gas turbine units - which DDIT won in 2003 - is part of the overall contract to build six pumping stations on the pipeline awarded by Sonatrach - the Algerian national oil and gas company, to the French/Italian consortium - Spie-Capag-Saipem GEIE, which has sub-contracted DDIT.
Under the reinsurance deal backed by ECGD, loans provided by a pool of banks, of which Société Générale is the arranger and agent, will be used by the Algerian national oil and gas company to pay for the pumping stations.
Steve Wildman, Commercial Director Oil and Gas for Demag Delaval Industrial Turbomachinery, in a press statement today said: "The company greatly values the opportunity to further develop the oil and gas infrastructure with Sonatrach with the support provided by the ECGD." According to Mr Wildman, the first DDIT gas turbines were supplied to Algeria in 1962 and now total 124 sets.
The export support for DDIT today also was appreciated by the British government. Mike O'Brien, UK Minister for Trade, commented that "the OZ2 Oil Pipeline will help boost Algeria's oil exports and increase the country's hard-currency revenues." Also for Britain, it was an asset, he added, as the deal would "also help support jobs at the DDIT's gas turbines factory" in the UK.
Oil reserves in Algeria are currently estimated to be 11.3 billion barrels although continuing oil exploration is expected to see this figure increase.
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